UK consumers spent £5 billion online in July alone, an increase of 18 percent on the same time last year and the largest increase since 2007 before the recession began. If the trend continues it means people in the UK will spend a whopping £600 billion online over the next ten years, up from the £250 billion it spent over the last ten.
The figures, which come from the latest IMRG Capgemini e-Retail Sales Index, show the substantial growth in online sales last month, which were up 14 percent compared to June, suggesting that the worst of the recession is well and truly over as far as Internet vendors are concerned.
“Although online retail sales survived the recession more convincingly than high street sales, the last two years or so have no doubt been shaky at times. It is really encouraging to see growth levels returning to those seen pre-2007 and before consumer confidence was knocked by the financial crisis and recession,” said Chris Webster, head of retail consulting and technology at Capgemini.
Online retailers have been doing extremely well, seeing an average revenue growth of eight percent and a sales conversion rate of 4.35 percent, but it is actually the companies with both an online and high street presence that did best, with an 18 percent revenue growth and 4.49 percent sales conversion rate.
“The evidence mounts that high street retailers will need to invest more in their online business and put it at the heart of their retail strategy,” said David Smith, managing director of IMRG. “Online retailers, on the other hand, will need to continue to innovate as they strive to close the growth gap.”
Much of the July increase can be attributed to standard seasonal growth due to people booking cheap holidays online, so we can probably expect the number to drop slightly as we head into Autumn and Winter. However, sales are likely to pick up in general over the next few years, making our £600 billion estimate for the next decade a very conservative one.